Relatives of former PSE official fall prey to stock market scam

Relatives of a former Philippine Stock Exchange (PSE) official, who supposedly scammed hundreds of millions of pesos from investors, claimed on Monday to have fallen prey to the same guy and lost their investment money.

Francis Carlo Cruz claimed he was sweet-talked by Jose Cecilio "Jay" Peñaflor into parting with some P420,000 to be invested in the stock market. 

Cruz and Peñaflor are cousins-in-law.

Peñaflor promised Cruz that the investment would yield up to P1.2 million. What made the pitch seemed credible was that Peñaflor was a relative and former assistant head of Market Education at the PSE.

Cruz said they were originally enticed by Peñaflor to invest in listed companies whose shares were trading at bargain prices.

"Jay is a first cousin of my wife, and this all started in June 2015 when Jay enticed us to invest in what he calls 'primary shares.' So, stock market siya," Cruz told GMA News Online. "Sabi niya these are very, very rare... a special kind of share, kasi certified... May mga pinapakita pa siya na certificate," Cruz said.

Cruz said he invested P120,000 in Petron Corp. and P300,000 in San Miguel Corp. (SMC). The shares were supposedly bought at discounted prices.

"Both of these, after 15 trading days – theoretically – kumita na ng 50 percent. So, P180,000 (for Petron) and P450,000 (for SMC)," Cruz said.

Cruz then claimed that Peñaflor enticed him and his in-laws to keep rolling their investments and make more money. He invested the supposed P630,000 in ABS-CBN Corp., and expected to come out with P1.2 million.

However, the invested amount and the expected returns never came back to Cruz.

"We never saw the money... The last time we spoke was in January, pero during that time hindi na siya nagpapakita physically," Cruz said. "Madaming excuses... Hindi raw makakabayad sa amin kasi binayaran niya students niya sa San Beda."

Peñaflor allegedly amassed an estimated P300 million through his supposed scam.

Calls and text messages by Cruz to Peñaflor went unanswered.

Case filed in QC

Cruz said he was compelled to sue his cousin-in-law before the Quezon City Hall of Justice on January 25, 2016.

"The preliminary investigation is going on right now. Our next step is to pursue the case legally. There's not much we can do right now except to see this through," he said.

"We were actually not the first to invest. Meron sa mga student niya sa San Beda, sa mga ibang tao. So, medyo late na kami pumasok...

"First of all, he worked for almost 10 years for the PSE. Second, he was a relative, so the trust was there... More than anything else this was very enticing for us," Cruz added.

The Securities and Exchange Commission (SEC) is conducting its own investigation into the matter.

"We are currently gathering pieces of evidence to validate the allegations that violations of securities law were committed. We want to ensure that the documents can stand the scrutiny of our prosecutorial agency and the court of law," SEC spokesperson Armand Pan said in a text message to GMA News Online.

"The complaints must pertain to violations of the securities law... Hence, if there were previous complaints filed with other agencies for other violations – not Securities Regulation Code (SRC), like estafa – we will assist parties to make the proper complaint in support of violation of the SRC. We are awaiting response from the alleged victims to determining how the perpetrator committed the SRC violations," he added.

Pan said that they asked the complainants for their full cooperation by providing documents that support their complaints.

Bounced checks

Cruz said that he will be presenting a promissory note and bounced checks from Peñaflor.

Cruz's father-in-law, Peñaflor's uncle, said the checks were from Bank of the Philippine Islands and Union Bank of the Philippines. But the father-in-law asked not to be named at this point.

The SEC also declined to reveal the details of its investigation.

"Please understand that investigation under the SRC is confidential until it is concluded, hence we cannot disclose details," Pan said.

The PSE earlier this week warned prospective investors that Peñaflor is not employed as a trader or agent by any of the accredited trading participants (TPs) or stock brokerage firms.

"In fact, our records also show that he is not licensed by the Securities and Exchange Commission as a salesman or trader of any of our TPs," it said in an advisory.

Brokerage firm Regina Capital Development Corp. denied any connection with Peñaflor.

"Mr. Peñaflor was an employee of the Philippine Stock Exchange (PSE), as such, he is prohibited from any employment in a PSE member brokerage firm. Stock brokerages are distinct corporations from the PSE," Regina Capital business development head Luis Limlingan said in an earlier email message. – VDS, GMA News